Ozga Enterprises, Inc. v. Department of Natural Resources

• Decision Date: 03 August 1995
• Docket Number: 94-0735,Nos. 94-0660,s. 94-0660
• Citation: 539 N.W.2d 335,196 Wis.2d 644
• Parties: NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES. OZGA ENTERPRISES, INC., Plaintiff-Respondent-Cross Appellant, v. WISCONSIN DEPARTMENT OF NATURAL RESOURCES and Wisconsin Department of Industry, Labor and Human Relations, Defendants-Appellants-Cross Respondents, George Meyer, Sam Rockweiler, Susan G. Josheff, James Quinlan, Defendants
• Court: Wisconsin Court of Appeals

Page 335

539 N.W.2d 335

196 Wis.2d 644

NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES.

OZGA ENTERPRISES, INC., Plaintiff-Respondent-Cross Appellant, v. WISCONSIN DEPARTMENT OF NATURAL RESOURCES and Wisconsin Department of Industry, Labor and Human Relations Defendants-Appellants-Cross Respondents George Meyer, Sam Rockweiler, Susan G. Josheff, James Quinlan, Defendants

Nos. 94-0660, 94-0735.

Court of Appeals of Wisconsin.

Aug. 3, 1995.

Before GARTZKE, P.J., SUNDBY and VERGERONT, JJ.

VERGERONT, J.

This case arises out of the efforts of Ozga Enterprises, Inc. (Ozga) to develop its property in Marquette County. Ozga appeals from an order dismissing all but one of its claims against the Wisconsin Department of Natural Resources (DNR), two DNR employees, the Wisconsin Department of Industry, Labor and Human Relations (DILHR), and two DILHR employees. Ozga also appeals from an order granting summary judgment to Marquette County on all of its claims against Marquette County. We granted leave to the two state agencies to appeal from a non-final order denying their motion to dismiss Ozga's procedural due process claim against them. ¹

We conclude that Ozga's amended complaint does not state a claim against the state agencies or the state employees for a taking of property without just compensation. Ozga's claims for money damages for violations of substantive and procedural due process against the state agencies are barred by the doctrine of sovereign immunity. Ozga's amended complaint does not state a claim against the state employees for either a substantive or procedural due process violation, or under 42 U.S.C. § 1983. Finally, the initial complaint was properly dismissed against Marquette County because that complaint failed to state any claim against Marquette County.

BACKGROUND

Ozga's first complaint named Marquette County and the two state agencies as defendants. The factual allegations were as follows.

Ozga's property is adjacent to a dam that created Mason Lake in Marquette County. Ozga obtained authority from DNR pursuant to § 31.12, Stats., ² to build a penstock and powerhouse on its property. Ozga then received a variance from the County's shoreland zoning ordinance to allow construction of a house and condominium with a reduced setback. Ozga began construction of the condominium on September 1, 1986, and the County ordered Ozga to cease construction the next day.

Ozga then filed applications with DILHR for the issuance of a private sewage system permit and to develop in a floodplain. DNR refused to sign the application to develop in a floodplain because it disagreed with Ozga on the original flood elevation and flood zone designation. DNR informed Ozga of this on November 13, 1986. In December 1986, the County refused Ozga's application for a zoning permit, stating that the entire property was in a floodplain. Also in December 1986, DNR filed a suit against Ozga alleging a violation of § 31.12, Stats., with respect to the construction of the penstock and powerhouse. That suit resulted in a stipulation to an injunction prohibiting further construction, but permitting Ozga to provide for security and maintenance of existing improvements.

The complaint also alleged that DNR filed a second lawsuit against Ozga on March 11, 1988, for a violation of Wis. Adm.Code ch. NR 116 for building within a floodplain. ³ On January 31, 1991, this court reversed the trial court order in this second enforcement action and reinstated the jury verdict. The jury had found that DNR's determination of flood elevation was not reasonable. ⁴

The complaint alleged that in 1989, before the trial, Ozga filed additional applications with DILHR for permission to develop in a floodplain and for a private sewage system. These were denied or refused further processing. Because of DILHR's denials, the County refused to issue a sanitary permit or a building permit, preventing completion of the project and depriving Ozga of all economic use of its property and causing other damages. The County adopted a floodplain ordinance on September 11, 1991, which renders Ozga's property practically and substantially useless for all reasonable purposes and precludes all development of the property.

Ozga asserted claims against all defendants for inverse condemnation, conspiracy and unconstitutional taking, conspiracy and deprivation of property without due process, conspiracy and violation of 42 U.S.C. § 1983, and a violation of § 134.01, Stats. The complaint requested monetary damages.

All defendants moved for summary judgment. On January 19, 1993, the trial court orally granted the County's motion entirely. ⁵ It also granted the state agencies' motion on all claims but the procedural due process claim.

Ozga amended its complaint on November 12, 1993. It added four individual defendants: George Meyer, the administrator of DNR's Division of Enforcement and alleged to be involved in the decision to bring enforcement actions against Ozga; Sam Rockweiler, the supervisor of DILHR's plan review unit and the person who denied Ozga's April 13, 1989 application for a private sewer system permit on the ground the construction was in a floodway; Susan Josheff, an environmental engineer employed by DNR who determined that the construction was in a floodway and who refused to sign the September 11, 1986 and April 17, 1989 applications for permission to build in a floodway; and James B. Quinlan, a DILHR plumbing inspector and plan reviewer.

The amended complaint contained substantially the same factual allegations as the initial complaint. New factual allegations of significance will be discussed below. The amended complaint requested monetary damages and asserted claims for deprivation of property without due process, taking of property without just compensation and without due process in violation of the state and federal constitutions, and a violation of 42 U.S.C. § 1983.

All of the state defendants moved for dismissal of the amended complaint on the grounds of sovereign immunity and that the amended complaint failed to state a claim upon which relief can be granted. The court granted the motion on all claims against the state agencies, except for the claim regarding procedural due process. As to those claims against the state agencies other than the procedural due process claim, the court decided that the claims were in reality claims against the state and were barred by the doctrine of sovereign immunity and because the state cannot be sued under 42 U.S.C. § 1983. The court concluded that the claims against Meyer were against him in his official capacity and dismissed the claims against him. The other individuals had qualified immunity, the court held, and were also dismissed.

STATE AGENCIES

Whether a complaint states a claim is a question of law that we determine without deference to the trial court's decision. See Williams v. Security Sav. & Loan Ass'n, 120 Wis.2d 480, 482, 355 N.W.2d 370, 372 (Ct.App.1984). ⁶ In determining whether a complaint should be dismissed, the facts pleaded and all reasonable inferences from the pleadings are taken as true. Irby v. Macht, 184 Wis.2d 831, 836, 522 N.W.2d 9, 11, cert. denied, --- U.S. ----, 115 S.Ct. 590, 130 L.Ed.2d 503 (1994).

We first consider the state agencies' argument that sovereign immunity entitles them to a dismissal of all claims. ⁷ The State of Wisconsin has sovereign immunity and may not be sued for monetary relief without its consent. Lister v. Board of Regents, 72 Wis.2d 282, 291, 240 N.W.2d 610, 617 (1976). This immunity from suit extends to the agencies of the state. Id. DNR and DILHR are therefore immune from suit unless the state has consented to suit against them on the claims alleged in the amended complaint. The prohibition in the Wisconsin Constitution against taking property for a public purpose without just compensation ⁸ is a waiver of sovereign immunity for claims alleging a violation of that constitutional provision and seeking just compensation. Zinn v. State, 112 Wis.2d 417, 436, 334 N.W.2d 67, 76 (1983). Ozga cites no authority for a waiver of sovereign immunity on its other claims against the state agencies except the dissent in Grall v. Bugher, 181 Wis.2d 163, 511 N.W.2d 336 (Ct.App.1993), rev'd on other grounds, --- Wis.2d ---, 532 N.W.2d 122 (1995). However, the majority in Grall clearly affirmed the principle of sovereign immunity and the requirement that there be an express waiver, even if the claims allege state and federal constitutional violations and seek relief under 42 U.S.C. § 1983.

We conclude there is no express waiver of sovereign immunity for any claim asserted in the amended complaint except the claim of a taking without just compensation. The trial court therefore properly dismissed the substantive due process claim. It should have dismissed the procedural due process claim against the state agencies for the same reason. ⁹ The trial court should not have dismissed the claim of an unconstitutional taking against the state agencies on the ground of sovereign immunity. However, we conclude that claim was properly dismissed because the amended complaint does not state a claim for a taking without just compensation.

The amended complaint alleges that Ozga was denied permits necessary to construct a condominium on its property and that the basis for the denials was a determination by DNR of the flood elevation that had no reasonable basis. ¹⁰ The amended complaint does not state the outcome of the second DNR enforcement action against Ozga after the determination of the flood elevation. ¹¹ Liberally construing the amended complaint in Ozga's favor, we read it to allege that DNR's denial of Ozga's request to build in a floodplain was determined to be in error, as was the denial of the other applications insofar as the...